Lessons From the Apple/Jobs Controversy


Apple has always prided itself on “thinking different.” While scores of companies are working to rebuild obliterated consumer trust in the wake of the financial crisis, Apple has gone against the grain, stirring up a contentious debate with silence and secrecy regarding CEO Steve Jobs’ recent liver transplant. The news contradicts prior public statements from Apple about Jobs’ health, which cryptically focused on a “nutritional ailment,” thus fueling debates on what exactly the company is obligated to disclose to its shareholders and other core constituents. The timing of the liver transplant news is especially awkward: It coincided with the unveiling of the new iPhone 3GS and Jobs’ public comments about record sales and “winning,” all while he remained tight-lipped on the state of his own health. There are numerous lessons communications executives can extract from the recent Apple controversy: â–¶ “No comment” launches a company out of the driver’s seat: While Jobs has a reputation as a hyper-controlling leader, he and Apple have lost all control of the story surrounding his health and ability to lead Apple into a prosperous future. Apple’s inconsistent communications and failure to lead the sensitive discussion has tossed control into the eager and distorting hands of millions of bloggers, media outlets and critics with competing and damaging agendas. Social media presents companies with both significant opportunity and risks for communication and branding. Apple should take advantage of this valuable opportunity to engage directly with its constituents and not only join but also guide the conversation. (For more on social media and reputation management, check out Digital Strategies for Powerful Corporate Communications [ McGraw-Hill, August 2009], co-authored by PR News editor Courtney Barnes and myself.] â–¶ No one is above transparency: Today, constituencies across the board are calling for transparent communication of all business activities. In this environment, Apple’s silence is remarkable—and dangerous. Whether or not Jobs violated Reg FD is not the core issue; to earn back trust, companies must not only adhere to the strict letter of the law, but also embody its spirit. They must go the extra mile in convincing all constituents —not just shareholders—that keeping them in the know is priority No. 1. â–¶ Withholding information chips away at goodwill: Failing to disclose the complete truth casts shadows of doubt and strain on even the strongest business relationships and corporate reputations. As an admired brand, Apple will eventually deplete its goodwill reserve if it sticks to an arrogant approach that keeps the world guessing. The iPhone, or any Apple product, is not without flaws, and Apple, like any company, is far from perfect. Its aloof reticence invites more scrutiny of its shortcomings—and less forgiveness when it inevitably makes mistakes. â–¶ A CEO’s job extends beyond the time spent in the C-suite: Like it or not, a CEO is paid to be the primary driver of shareholder value and to contribute personal brand equity to a company. In the cases of iconic leaders like Martha Stewart, Jack Welch, Sir Richard Branson and Steve Jobs, leadership and personality become entangled with the brand itself. While there is nothing more personal and private than an individual’s health, and Job’s medical condition is no doubt tragic, a leader’s physical state has bottom-line implications for a company. This is particularly applicable in the case of Jobs, widely considered to be the primary driver of Apple’s innovative spirit since he co-founded the company in 1976. Access to equity markets comes at a cost and, as a publicly traded company, Apple must acknowledge its responsibility and act with a sense of accountability. â–¶ Product marketing and corporate communications need to speak with one voice: The gloss and hype that have become part and parcel with Apple’s product launches and advertising campaigns have a feel-good tone that has helped win over its loyal customer base. That marketing strategy will start to ring hollow with a skeptical public if Apple cannot communicate clearly about something as vital as its CEO’s health. Being mysterious and detached from constituencies may start to undercut the “feel-goodness” of its marketing efforts. Marketing and communications must be consistent and integrated, particularly at consumer- and retail-reliant companies such as Apple. â–¶ Loyalty must be built for the long term: A truly great company is much more than the sum of its innovative products and an addictive brand. The novelty and value of these assets are fleeting and will eventually expire, even for cult brands like Apple. Lasting companies, which enjoy consistent success over the very long term, recognize that their most important assets aren’t their product line or their bottom line but the strength of their relationships with core constituents. While Apple aspires to “think different,” it is time for the company to align with the more open communications approaches taken by other mega-brands. As immediate next steps to curb reputational damage, Apple should: • Come clean: Be much more transparent and realize that a high level of responsibility comes with Apple’s status as a publicly traded company and a premier global brand. • Grab hold of the Apple story: No company should allow the media and online community to take charge of its storytelling. Apple and Jobs must reclaim control and reshape the company’s communications strategy to be more inclusive and less enigmatic. • Put Jobs and his board center-stage: Apple should pull back the curtain and engage both Jobs and the board of directors for an honest and authentic discussion with all constituents to explain the state of CEO and business health, its current plan of action and its future management strategy. PRN CONTACT: Paul Argenti is professor of corporate communication at the Tuck School of Business at Dartmouth. He can be reached at paul.argenti@dartmouth.com. Jennifer Farrelly and Kimberley Tait, senior research associates, contributed this piece.

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